BASF puts production plans in Finland on hold

BASF puts production plans in Finland on hold

The chemical company BASF has put production plans for battery chemicals in Harjavalta, Finland on hold. After an administrative court withdrew the provisional operating license in February following complaints from environmentalists, the company says it now wants to release employees for an indefinite period of time. The further postponement and the uncertainty as to what will happen with the formal commissioning would have “long-term financial consequences”. BASF therefore has to adapt operations and reduce costs. Of course, there is still no real business there today. The plant is still under construction and, according to the company, only a double-digit number of employees will be affected. In fact, this means that one of the most important projects for building a purely European value chain for battery chemicals is in jeopardy.

In Finland, BASF wants to process nickel from the mines of the Russian raw materials company Nornickel into intermediate products for the cathodes. Cathode material is considered the most expensive component of traction batteries and accounts for between 30 to 40 percent of battery costs. The preliminary product manufactured in Finland, a powder called precursor, is to be further processed into cathode material in Schwarzheide, Brandenburg, one of the largest BASF locations. BASF also wants to build a recycling plant for used batteries at the Schwarzheide flagship plant, which received state funding of 175 million euros.

The plant in Schwarzheide is currently supplied by a “broad partner network” and production is not affected. According to previous information, the material comes from Australia, among other places. However, after BASF announced the plans in Finland, they were marred by delays. A provisional operating license in 2020 was withdrawn, and now a court has again revoked a license that had already been granted. BASF expressed disappointment at the contradictory signals from the authorities and administrative courts. In a highly competitive market like the battery market, speed and planning security are crucial.

Although the plant can run on green energy, there is a problem with the production of sodium sulfate, which could have an environmentally harmful impact on the Baltic Sea. BASF could solve the problem by building a “crystallizer,” but this would lead to additional costs and a delay in the start of production by two years. BASF had meanwhile announced that it would send the contaminated wastewater to another company for disposal, but after research by environmental organizations, the court withdrew the temporary operating license. Now another court must decide whether, when and under what conditions BASF will receive an unlimited license.